• EUR/USD is posting modest gains in the 1.1840 region.
• US Initial Claims, flash Q2 GDP figures next of note in the docket.
• Fed’s J.Powell speaks at the Jackson Hole Symposium later in the session.

EUR/USD is prolonging the choppy performance so far this week and manages to keep the positive territory around the 1.1830/40 band.

EUR/USD looks to data, Powell

EUR/USD stays side-lined within the 1.1770/1.1850 range so far this week against the backdrop of rising cautiousness ahead of the key speech by Chief Jerome Powell at the Jackson Hole Symposium later on Thursday. In the more macro view, investors keep gauging the advance of the coronavirus pandemic vs. the unabated pick up in infected cases, particularly in Europe, while the likeliness of US lawmakers to pass another stimulus bill appears to have died off.

The recent positive news surrounding the US-China protracted trade conflict – particularly around the ‘Phase One’ deal – seems to have lent extra oxygen to the riskier assets and somewhat limited occasional bearish moves in spot. In the euro docket, Italian Industrial New Orders expanded 23.4% MoM during June and Industrial Sales expanded 13.4% inter-month in the same period. Data from the ECB saw M3 Money Supply expanding 10.2% on a year to July and Private Sector Loans expanding 3.0%. Across the ocean, another estimate of Q2 GDP is due seconded by usual weekly Claims, all ahead of the crucial speech by Chief J.Powell at the Jackson Hole Symposium.

What to look for around EUR

EUR/USD is now facing some consolidation after hitting fresh tops near 1.1970 earlier in the month. The July-August rally, while largely triggered by broad-based dollar-selling and improved sentiment in the risk-associated universe, found extra sustain in auspicious results from domestic fundamentals - which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis – as well as US-China trade headlines. Also lending wings to the momentum around the euro appear the deal on the European Recovery Fund – which helped putting political fears within the bloc to rest (for now) – and the solid position of the current account in the region.

EUR/USD levels to watch

At the moment, the pair is gaining 0.03% at 1.1832 and a breakout of 1.1965 (2020 high Aug.18) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the other hand, immediate contention emerges at 1.1772 (weekly low Aug.26) seconded by 1.1754 (weekly low Aug.21) and finally 1.1695 (monthly low Aug.3).